Arrests barely dent sugar smuggling

RIGA - Latvian police say they have broken a sugar smuggling ring with the arrest late last month of two men caught filling bags with contraband sugar on the outskirts of Riga.

Illegally imported sugar has been a constant problem in Latvia, where measures to protect local sugar producers and beet farmers have led to smuggling.

Both men arrested Jan. 31 after a police sting operation at a paper mill in the city suburbs were customs officials, according to national police spokesman Krists Leiskalns. Two of them have been identified only as customs officers Aigars B., 32, and Aleksandrs V., 43. They were charged with organized smuggling and remain in police custody.

Leiskalns said police had been aware of their activities for weeks.

The supply shortage combined with high prices and heavy import restrictions has led to increased smuggling, Leiskalns said

"Last year we had cases where we seized 30 tons and 40 tons of sugar."

Smugglers usually bring in white sugar from European Union countries, according to an industry source who requested anonymity. The sugar is higher quality than domestically produced and is half the price.

Latvian sugar currently costs about 350 lats ($543) per ton. The price on world commodities markets is about $220 per ton packed.

There are two sugar producers in Latvia - Jelgavas Cukurfabrika and Liepajas Cukurfabrika - which combined can't meet consumer demands, according to industry observers.

Latvia's two factories would be unable to survive if the market opened to imports, which opens the door for smuggling.

Some of the smuggled sugar ends up on supermarket shelves with labels saying it was produced in Latvia, the source said. Much of it also goes to commercial candy makers.

Thousands of tons of refined sugar bound for Russia, Ukraine and Kazakhstan disappear from Latvia's ports and border check points every year, authorities say.

Harijs Vegeris, managing director of Jelgavas Cukurfabrika, estimates 20,000 tons of sugar are smuggled into the country annually.

"Smuggling is a very big problem," Vegeris said.

In the year 2000 Latvians consumed 19.59 kilos of sugar per capita, or 46,610 tons, according to the central statistics bureau. But that figure does not include commercial consumers like candy and confectionery producers.

Liepajas Cukurfabrika produced nearly 22,000 tons of sugar for the Latvian market, according to the Ministry of Agriculture, while Jelgavas Cukurfabrika's production reached 34,000 tons.